On its Sunday editorial page, the Longview Daily News hit the nail on the head about the need for workers' comp reform in Washington:
Local businesses and their employees are about to get hit with significant tax bill just when they can least afford it. Daily News business writer Erik Olson reported this month that workers’ compensation insurance rates are due to increase 7.6 percent at the first of next year. That’s the biggest increase since the eye-popping 29 percent rate hike in 2003 revived talk of making fundamental changes in this state-run insurance program.Unfortunately, that talk produced no changes. The cost of workers’ comp continues its upward march in good economic times and bad, burdening Washington employers and employees and giving pause to businesses and industries that may be looking to move into the state.
The editorial considered the distressing effect of the rate hike on two local businesses:
Employers and employees share the cost of this insurance, with workers paying 27 percent. Their share will bump up to 27.8 percent next year. It’s a significant amount of money. Olson reported that C&C Logging, of Kelso, has paid $400,000 in workers’ comp premiums this year and the insurance cost is expected to rise by at least $80,000 next year.
Rates are set higher for logging companies than most other businesses because logging can be a dangerous occupation. But all Washington businesses shoulder a big burden in workers’ comp. Dale Lemmons, the owner of Interstate Wood Products and Signature Transport, told Olson that he expects the Jan. 1 rate increase will cost his Kelso trucking business an additional $25,000.
That’s a big hit in this economy, the worst since the Great Depression. But, as Olson noted, it’s how this state-run insurance program works. Costs are certain to rise in a down economy. Layoffs reduce the amount employers and employees pay into the program. Investment returns go south. And, of course, the cost of health-care for injured workers continues to rise.
The piece concludes echoing our sentiment that it is past time for some common sense reforms to help curb these poorly controlled costs:
State elected officials have long recognized the drag this workers’ compensation program exerts on businesses and industries in the state. Washington has some of the highest workers’ comp rates in the West — higher than its neighbor’s to the south. Many in the Washington Legislature have attempted to address the problem over the years, with little result. It’s past time for some fundamental reforms. Workers’ comp costs have made Washington an expensive place to do business, and are continuing to do so. That’s something the state can ill-afford to tolerate much longer.
